Avago to acquire Broadcom for $37 billion

29 May 2015 |

Avago Technologies is to acquire chipmaker Broadcom for $37 billion.

Under the terms of the deal, Avago will pay $17 billion in cash and 140 million in shares, valued at $20 billion. The Singapore-based company will fund the cash consideration with cash on hand from the combined entity and $9 billion in financing from a bank consortium.

Shareholders of Broadcom will own approximately 32% of the combined company. In addition, they will have the option to elect for cash, shares or a combination of the two.

The acquisition of Broadcom - a provider of technologies such as ethernet and Wifi - will create the world’s sixth-largest chipmaker, with annual revenues of $15 billion and a complete set of products for fixed and mobile communication industries.

“Today’s announcement marks the combination of the unparalleled engineering prowess of Broadcom with Avago’s heritage of technology from HP, AT&T, and LSI Logic, in a landmark transaction for the semiconductor industry,” said Hock Tan, president and CEO of Avago.

“The combination of Avago and Broadcom creates a global diversified leader in wired and wireless communication semiconductors. Avago has established a strong track record of successfully integrating companies onto its platform.”

The deal is expected to be completed by the first quarter of 2016, subject to regulatory and shareholder approvals.